Distressed bonds see early losses, late gains; Caesars, TXU move up after roller coaster ride

By Stephanie N. Rotondo

Portland, Ore., Aug. 11 - Distressed debt began the day weaker, a trader said Thursday, but managed to finish up the session with a more positive tone.

Caesars Entertainment Corp.'s bonds, for example, swung wildly in a 7-point range.

"That was the extreme, but that was the way the day went," the trader said.

Energy Future Holdings Corp.'s debt also gyrating about with the market.

Some credits, however, were trading actively but unchanged. Clear Channel Communications Inc. and NewPage Corp. were both actively quoted, but "kind of unchanged" from the day before.

Meanwhile, Nortel Networks Corp.'s bonds were deemed "very quiet," though the company posted earnings during the session.

"Everyone just watched stocks today," a trader said. The sell-off earlier in the week had resulted in volatility in distressed paper, which then gave way to good volume in the space as investors fled riskier investments. With the equity markets attempting to come back, volumes in the distressed arena were down again.

Caesars, TXU up, NewPage unchanged

Caesars Entertainment's recently volatile 10% notes due 2018 swung in a 7-point range Thursday, eventually ending the day higher than the previous one.

A trader said a 72½ bid was hit first thing in the morning and soon, the paper had traded as high as 791/4.

Energy Future's 10% notes due 2020 were also "really active," opening around 96 - which was down from 98 on Wednesday's close - and finishing up around 99.

"Everything traded off quickly and then came back," the trader said.

While some issues were posting gains, others were content to stay where they were.

A trader said Clear Channel's 11% notes due 2017 were unchanged around 703/4, while NewPage's 11 3/8% notes due 2014 closed around 801/2, up from opening levels of 78½ bid, 79 offered.

Still, the trader said the latter issue was "kind of unchanged" day over day.

Nortel steady post-earnings

Nortel Networks' notes were quiet, with the 10 1/8% notes due 2013 and the 10¾% notes due 2016 trading around 109, according to a trader.

The Toronto-based bankrupt telecommunications equipment manufacturer reported its second-quarter results Thursday. However, since filing for bankruptcy in January 2009, the company has sold off all of its assets, bringing in $3.2 billion.

Additionally, the company took in $4.5 billion from its patent auction sale to a group led by Apple Inc.

With fewer businesses to bring in funds, revenues dropped to $1 million from $145 million the year before.

"We expect minimal revenues for the remainder of 2011," the company said in a press release.

As of June 30, Nortel had $790 million in cash, versus $775 million as of March 31.

Net loss was $115 million. By comparison, net loss was $1.6 billion in the second quarter of 2010.

Chrysler improves

A trader said that the Chrysler Group LLC bonds, which priced at par on May 19 - $1.5 billion of 8% notes due 2019 and $1.7 billion of 8¼% notes due 2021 - were trading at 83 bid, 84 offered, up from 80 bid, 83 offered on Wednesday.

Paul Deckelman contributed to this article

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.